Prof. Patrick O. Connelly: Selection and Development of Basic Human Capital Foundation for Enterprise Competitive Advantage
Creating a reliable enterprise support platform demands certain core competencies and an ability first, to optimize the value of existing key resources. Then, leveraging this strong base, complement the basic teams with more diverse expertise destined to drive both their comparative advantage and competitive advantage to higher and presumably even unassailable levels in markets around the world.
In general, there are traditional groups within each enterprise that drive basic business functions. Enterprise size, market and capitalization will determine the selection, staffing and hiring within the group. Regardless, common features that drive successful implementation and growth, the essential elements of people and process optimization in enterprises remain consistent across all enterprises.
Within each functional area there is a need to establish and nurture a fundamental competency upon which to base continuous improvement, reflective of the nature of markets. In these articles I have chosen to investigate each level of contribution as follows:
- Level I Enterprise Associates
- Level II Department
- Level III Group
- Level IV Operating Unit or Enterprise
First and foremost, the seeds of success begin with (arguably) the most important resource or factor available to the enterprise…its human capital…in fact, you the reader.
1 “Fighting the decline…solutions for improving business performance”, Prof. Patrick O. Connelly, ICM Magazine UK, August 12,2012 pages 34-37.
Growth, the speed, efficiency, effectiveness of operations and the sustainability of growth all results from successful human interaction; with other human resources and with business processes designed to effect successful process outcome. The critical questions challenging you the reader include:
- Do we select our associates with a clear understanding of the complete range of their skills, and fully utilize the available individual resources?
- Do we design, describe and maintain the various functions with an understanding of the current integrated role they play within the organization?
- Do our associates enjoy a clear understanding and at least minimum acceptable competency in their functions when they complete the period of probation?
- Do policies and procedures, as well as function processes reflect and provide current, applicable and sufficient process boundaries, authority, and responsibilities to enable development of a competent and informed associates?
- Is the associate periodic evaluation and development process current and does it encourage motivated associates to strive for greater success, faster within the enterprise?
- Do we encourage teaming and cross-functional dialogue to promote a better process understanding and reduce dissonance?
The proper answers to these questions result in a selection and succession planning process that has been demonstrated to drive organizational results: top- and bottom-line, stock price and market perception, reputational capital of the enterprise, and promote growth both organic and by acquisition.
A model of the recommended human capital development process follows.
Development Diagram of an Associate
Ordinarily, the largest concentration of resources rests in the entry and middle levels and the future of the enterprise depends on the successful selection and development of this talent.
New Hire Selection and Initial Development
- Training includes:
- Direct Functional Training
- Enterprise positioning information
- Mentoring in group dynamics
- Basic system skills orientation
- Interacts with other groups as indicated
- Actual contribution period begins:
- Carry out day-to-day functionality
- Subject to ongoing performance review and encouragement
- Source for succession planning of the enterprise
Key Level I Performance Drivers
Human Capital Process Capital
Hiring parameters Policies reviewed and confirmed
Skill inventory tool Practices/Procedures current
Performance review document and process Executive sign-off
Feedback mechanism Symmetric Communication
Mentor network Customer delight focused
The Forrmula for Success
- Entry level:
- Select the best possible talent from the pool of resources available
- Assure an understanding at hiring of the functional requirements of the enterprise and the objectives of the new hire, establish congruence to manage mutual expectation
- Assure proper implementation of the functional training program, introduce frequent reviews, particularly in the probation period
- Focus the associate on the value of performance in establishing a future of growth and success with the enterprise.
- Measure performance and provide feedback according to actual against expected performance
- A history of functional performance often provides the lead and supervisory base of associates to drive growth and continuous functional improvement
- Introduce formal initial and continuous training in people management skills and other professional development opportunities both internal and external to the enterprise
- Provide a forum for supervisors and managers to share knowledge across department and group boundaries. People management is a demanding skill which is impacted by a constantly changing market and workforce. Further, it introduces talent among key potential opportunities inside the enterprise.
- Integrate external best practice with internal process and objectives in order to assure continuous improvement and for the enterprise a competitive advantage
- Directors and above should have demonstrated an ability to drive cross-function team support
- Leadership should mentor and train senior managers to facilitate faster development and contribution to the enterprise
With this in mind, consider these steps to success:
- Properly vet and select each candidate
- Assure the job description is current and the criteria is consistent with the current and immediate future needs of the hiring group
- Ascertain what talent, expertise, competencies the candidate offers beyond those specifically established by the job description
- Review each candidate with a mind towards your skills inventory and succession plan, even when interviewing new hires in early career positions
- Select the best talent available for your immediate needs, but be open to the needs of peers, so as to retain important value for the firm
- Sharing an important “find” with a peer. Enabling a valuable resource into the company benefits your peer, you, the group and the enterprise.
- Develop and maintain an integrated internal and external functional training program that effectively and quickly introduces the associate to the range of demands and expectations. Materials to describe the tasks and a mentor to explain process rationale often improve comprehension and shorten time to productive contribution.
- It is important to reinforce new hire expectations with the reality that employment continuity as well as further opportunities in the enterprise will be based first, upon the manner in which the current function is accomplished. Review and reinforce to drive proper outcome.
- Position the resource to generate optimum contribution. Often excellent contributors are positioned in a manner that limits, even stunts growth and contribution. Motivation problems and slow development often follow and managers should react immediately to avoid loss of high-potential resource.
- Motivate and encourage growth. Functional growth is often stimulated by an overview of the “larger picture”. Tasks performed by an associate are important in many ways to organizational success. Often in the experience of describing how particular functions contribute, a mentor finds unintended benefits beyond associate improved understanding.
- Integrate customer and market experience into the mix. Understanding how a client enterprise is impacted by the associate’s task is a gateway to communication, understanding … and customer delight. Though customer interaction introduces an additional requirement for training, insight, development and, in the short term…risk; it nevertheless facilitates an opportunity to build stronger customer alignment and assists in more quickly developing the associate.
- Create a team consciousness. No single driver is exclusively responsible for enterprise success and competitive advantage. Integrating the primary drivers of enterprise customer portfolio growth: Sales, Marketing and Credit/Finance, into a cohesive resource for driving top- and bottom-line growth offers a continuing opportunity to:
- identify client and market opportunities,
- identify and effectively hedge various risks,
- reduce internal organizational dissonance,
- establish continuous and virtually unassailable competitive advantage.
This process has the benefit of having been implemented successfully across a broad spectrum of sized-enterprises and industries.
How do we achieve the objectives noted previously within the constraints of limited budgets, local human resource pools, highly competitive markets and the short term need to achieve stakeholder satisfaction?
As you review the functions that serve your area of responsibility, also review:
- job description – assure it:
- fully describes the basic education and background requirements
- properly describes the bounds and responsibilities of the function
- establishes bilateral expectations regarding output, reward, growth, development opportunities, etc.
If the task has evolved, descriptions are stale, dated, or not effective, etc. Initiate CHANGES to assure proper understanding and hiring fit. This may avoid disappointment, stress or even failure at the function, even organizational level.
Efficient operations require that individuals understand and perform tasks which are properly designed and described so as to result in continuing successful accomplishment in support of the objectives of the enterprise.
Every job and its related job description should be reviewed and evaluated to assure:
- current and necessary as stated
- properly describes the required tasks
- fits into the schedule of tasks to contribute maximum efficiency and value to the group and ultimately the enterprise
- requests insight from associates on skills, competencies they might have that introduce additional value to the group:
- language skills
- cultural experience
- lead, supervisory or managerial experience
- training or education
- other complementary experience
- This provides an interesting opportunity for management to initiate a review of the existing tasks, performance success, and possible amendments to the task description. For associates it provides a forum to introduce observations and ideas for open discussion. The objective of the exercise is both to improve the job description and identify possible succession candidates, in this, or other groups.
- Skills assessment:
- does the candidate possess required skills
- must further training be set to enable the candidate to meet expectations of the enterprise, and hiring manager
- does the candidate possess skills of value to the enterprise, beyond those supporting this specific task
This article provides sufficient insight into the candidate identification and selection process. Every management minute spent in assuring a smooth selection and development process both of the candidates and the policies and procedures that guide them, translates into:
- better talent and fit identification
- improved overall hiring practices
- lower turnover of desirable resources
- more effective transfer and retention of critical knowledge
- better customer engagement and performance perception
- stronger base through which to develop a succession plan
- stronger reputational capital and stakeholder support.